- DuPont (DD) spun off its performance chemicals unit (including Teflon) into Chemours (CC). The new company told investors it plans on paying out a stable dividend, which is somewhat unusual for such a cyclical business. In addition to the challenge of cyclicality, the company faces environmental litigation and remediation which could also suck up some of its available cash meant for investors. Barron’s highlighted a note by UBS’ research team suggesting that Chemours could trade at a higher yield than Tronox (TROX). I am sure Nelson Peltz is watching this one very closely…
- Energizer (ENR) separated its personal care unit, Edgewell Personal Care (EPC), from its household products business (which is basically the batteries unit now)
- Baxter (BAX) spun off its pharma business Baxalta (BXLT). Could it ‘spark’ a rally?
- NiSource (NI) shed the Columbia Pipeline Group (CPGX)
- Integra LifeSciences (IART) said farewell to its spine business SeaSpine (SPNE)
- Graham Holdings (GHC) continued its radical transformation with the spinoff of Katherine Graham’s ‘best acquisition’, Cable ONE (CABO)
Naturally, the moves led to a whole lot of shuffling within the S&P indices and it will certainly be interesting to track how the new names trade. Of course, there are some other things going on in the world which may or may not have an impact on the overall markets.
The week may be effectively coming to an end for the market, but the ‘Summer of Spin’ is merely taking a breather. July will also bring about eBay’s (EBAY) spinoff of Paypal and August will feature a spinoff from Barnes & Noble (BKS). Paypal isn’t even waiting for its independence to make waves as analysts are currently buzzing over its announced $890m acquisition of Xoom (XOOM).
As the summer continues, we will be sure to keep you up to date.
Disclosure: Author holds no position in any stock mentioned.